GLG News by North Sea Oil and Gas Production Consultants

Chris Le FevreBoard MemberNorthern Ireland Authority for Energy Regulation

EU may be in for a long wait for new sources of pipeline gas from Central Asia

April 24, 2008

Analysis of:EU and Central Asian gas | www.upi.com

The EU, which relies on Russia for around 29% of its gas supplies, is keen to develop new sources of supply. The countries of Central Asia (and Turkmenistan in particular) have long been targeted as potential suppliers though there are major obstacles which include lack of alternative infrastructure and questions over the availability of sufficient gas reserves.  Turkmenistan is keen to build stronger relations with the EU though at present most gas exports are sold under long term contracts to Gazprom which has recently agreed to pay market related prices to Turkmenistan - this in turn reduces the potential benefit to Turkmenistan from selling direct to Europe. At the recent meeting Turkmenistan "promised" to supply 10bcm/a to Europe though the practicalities of construcitng new infrastructre on this basis are huge.  Whilst Turkmenistan is likely to continue to develop new supply routes to protect its position the markets of China and maybe India may prove more attractive than Europe.

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